Spread Betting Glossary: C
1. Capital Gains Tax: A UK tax on all gains made from disposing appreciated capital (i.e. assets), in excess of the annual exemption. Spread betting is tax exempt in the UK.
2. Cash call: Synonymous with 'margin call', the broker demands a further deposit from the trader to cover his potential exposure to a position that is losing.
3. CHAPS: A UK payment system where funds can be sent to the recipient bank account within the same business day.
4. Closing trade: A trade that mirrors an open position in reverse and thus closes the position, crystallising either the profit or the liability of the trader.
5. Commodities: Generic goods, often raw materials, which are bought and sold in specified, standardised amounts, traded for speculation and end use worldwide. For example, oil, cotton, coffee.
6. Contract size: The minimal value of a future or option, sized at the notional value of the contract.
7. Credit account: An investment account where the trader is afforded credit terms without the need for deposits to cover margin.
8. Credit limit: The limit set in a credit account, dictating the maximum level of exposure permitted before margin call.
9. Currencies: Usually traded in pairings, global currencies are traded on individual indices, and traded by forex traders and spread bettors alike, with markets open 24 hours a day to allow global round-the-clock trade.
10. Cut and reserve: Closing an open position and opening a new position simultaneously.